KARACHI, March 17: Stocks on Monday showed widespread decline on panic selling triggered by president Bush’s ultimatum to Iraq to disarm itself within a day and evacuation of the US citizens from the front line Gulf countries.
The KSE 100-share index plunged by 54.36 points or 2.14 per cent as all the leading base shares suffered sharp setback under the lead of PSO, PTCL and Hub-Power. But late support at the dips allowed it to finish partially recovered at 2,485.89 after at one stage briefly breaching through the barrier of 2,500 points. Earlier,it has dropped by 70 points.
“The perception that the Gulf war is now imminent sent shock waves among the investors and the brokers alike as everybody was out to tailor their positions to suit the war-like conditions,” says a leading stock analyst.
The evacuation order for the non-diplomatic US citizens from the front line countries signals an imminent attack, some others fear.
“Oil worries are there,” one broker said adding “they alone could upset the current economic and stock trading priorities for a considerable time.”
But we don’t think any major change in the prevailing price outlook at least until the US attacks Iraq. However, panic is there among the investors who are not inclined to make fresh long-term commitments for obvious reasons.
During the initial stage of the war, the market will give highly erratic price movements sometime touching the limits of nervous and hasty selling and sometime buying flurries at dips on selected counters.
President Bush’s patience seems to have touched the last limits as he vows to go it alone as France and Russia have threatened to veto any UN Security Council resolution not allowing more time for Iraq to disarm itself.
How the Gulf war shapes is not clear at this stage but one thing appears certain it could turn into world oil war in which major NATO powers have a stake. And that factor worries investors here.
“What will be the actual negative impact of the Gulf war on Pakistan economy is clear as an oil importing country could be at a disadvantage on all the fronts,” says a leading broker.
Energy shares, notably PSO and Shell Pakistan should have taken investors along with them as the Saturday’s upward revision of petroleum prices has ensured for them windfall profits in the form of inventory gains. Shell Pakistan gained but PSO lost on selling and failed to give the market a positive direction.
Although minus signs dominated the list, some of the leading shares managed to finish modestly higher under the lead of Shahtaj Textiles, Ismail Industries, Clariant Pakistan, Shell Pakistan, Dawood Hercules, Honda Atlas, and Wyeth Pakistan, up Rs1.60 to Rs28.
Prominent losers were led by the energy shares, notably National Refinery, Pakistan Refinery, Shell Gas, PSO and Pakistan Reinsurance Co, off Rs2.95 to Rs9.95.
Other losers included Attock Refinery, Pakistan Oilfields, Atlas Honda, Hino-Pak Motors, Adamjee Insurance, Pak-Suzuki Motors, Reckitt and Benckiser, and Bata Pakistan, which fell by Rs1.60 to Rs2.95.
Trading volume shrank to 90m shares as leading bears kept to the sidelines from the previous 179m shares. Losers held a strong lead over the gainers at 157 to 62, with 24 shares holding on to the last levels.
The most active list was topped by Hub-Power, lower 20 paisa at Rs34.85 on 26m shares, PSO, off Rs9.70 at Rs192.70 on 13m shares, PTCL, easy 45 paisa at Rs21.25 on 12m shares, Sui Northern Gas, off 75 paisa at Rs21.90 on 6m shares and FCC-Jordan Fertilizer, easy 60 paisa at Rs10.30 on 5m shares.
Other actives were led by Dewan Salman, lower 60 paisa on 4m shares, Engro Chemical, off Rs1.45 on 3m shares, ICP SEMF, easy 10 paisa also on 3m shares, MCB, lower Rs1.45 on 2m shares and Bosicor Pakistan, off 85 paisa also on 2m shares.
FORWARD COUNTER: Speculative issues also came in for active selling under the lead of PSO, off Rs9.50 at Rs193.30 on 6m shares followed by Fauji Fertilizer, MCB and Engro Chemical, which suffered fall ranging from one rupee to Rs1.45 at Rs74.50, Rs31.25 and Rs78.25 respectively.
Among the actives, Hub-Power again led the list, off Rs1.20 at Rs34.95 on 10m shares. PTCL, easy 50 paisa at Rs21.20 on 3m shares and Sui Northern, off 60 paisa at Rs21.95 on 2m shares and FFC-Jordan, lower 55 paisa at Rs10.30 on 1m shares.
DEFAULTER COMPANIES: Mixed trend was seen on this counter as investors played on both sides of the fence. Suzuki Motorcycle came in for stray selling and fell by 40 paisa at Rs8.60 on 15,500 shares followed by Pak Ghee, up 10 paisa at Re1 on 5,000 shares and Schon Modaraba, easy five paisa at Rs0.55 on 2,500 shares. Others were modestly traded.